Edtech unicorn Unacademy will implement cost-cutting measures such as pay cuts for founders and management, shut its global test prep platform, stop complimentary meals and snacks, in a bid to focus on profitability and increase efficiency.
Founder Gaurav Munjal, in a company wide Slack post, told his employees that the company is “not efficient at all” despite having ₹2,800 crore in its coffers. He said, a lot of unnecessary expenses are being done. “We must cut all these expenses. We have a strong core business. We must turn profitable asap(as soon as possible),” he wrote.
Munjal plans to shift the focus from growth to profitability going forward. Stressing on developing frugality as a ‘core value’, he said, as the company was concentrating on growth and had raised millions of dollars in funding, frugality wasn’t a priority.
“But the objective has now altered. In the following two years, we must do an Initial Public Offering (IPO). And we have achieved positive cash flow. To achieve this, we must make frugality a core value,” he said.
As a part of cost cutting exercise, the edtech startup will shut down certain businesses that have failed to find product market fit like the Global Test Prep. It will also implement a salary cut for founders and management, remove the privileges of dedicated drivers of CXOs, stop business class travelling for everybody, and stop complimentary meals and snacks at offices.
Munjal believes achieving profitability will take the startup to a ‘different league.’ In the post, he wrote, “Now all of these changes might make it seem that we are in a bad state. Trust me. We are not. We are in a great state. This is the final frontier that we have to conquer. Profitability. And once we do, it will change the game for us.”
This is Munjal’s second letter to the staff in the previous two months. Given the possibility of a ‘funding winter,’ Munjal in May, had cautioned his employees to function under “constraints”.